(delivering the judgment of the court): This is an appeal against the award of interest by Rajah J. in an action for damages for loss suffered by the dependants and estate of Wong Kam Thong who was killed in an industrial accident caused by the negligence of the appellants on 26 September 1981.

On the day of the trial, the parties agreed damages at $165,000 with liability to be apportioned on a 75:25 basis between the appellants and the respondents. As the parties could not agree on the question of interest, this issue was left for determination by the learned judge. After hearing counsel, Rajah J. awarded interest at 6% on $123,750 being 75% of the agreed damages from the date of service of the writ.

In arriving at this award, it would appear that the trial judge had applied the principles laid down in Jefford v Gee [1970] 1 All ER 1202 for fatal accident cases. These principles were set out by Lord Denning M.R. at p. 1209 of his judgment as follows:

"When the courts award damages to a widow under the Fatal Accidents Acts, they award one lump sum calculated by taking the yearly pecuniary loss and multiplying it by a number of years' purchase. The courts do not divide it into two parts, such as special damage up to date of trial and future loss after the date of trial. They treat it as damage inflicted once and for all at the time of the accident. The damages are calculated at so many years' purchase, no matter whether the case is tried one month, one year, or three years after the accident. Quite often these claims take some time to investigate, both on the issue of liability and also on damages. A reasonable time should be allowed for such investigation. At the end of that time, if the case is not settled out of court, the plaintiff's advisers should issue and serve the writ and the defendants should make payment. From that time onwards it can properly be said that a widow and dependants have been kept out of their money. In these circumstances, we think that interest should be awarded on fatal accidents damages as from the date of service of the writ."

This practice of awarding interest on the entire capital sum in fatal accident cases has since been changed by the Court of Appeal in Cookson v Knowles [1977] 2 All ER 820 (CA) which was upheld on appeal by the House of Lords (see Cookson v Knowles [1978] 2 All ER 604 (HL)). The new guidelines for assessing damages in fatal accident cases are set out succinctly by Lord Diplock at p. 612 as follows:

"(1) In the normal fatal accident case the damages ought, as a general rule, to be split into two parts:

(a) the pecuniary loss which it is estimated the dependants have already sustained from the date of death up to the date of trial ('the pre-trial loss'); and

(b) the pecuniary loss which it is estimated they will sustain from the trial onwards ('the future loss').

(2) Interest on the pre-trial loss should be awarded for a period between the date of death and the date of trial at half the short term interest rates current during that period.

(3) For the purpose of calculating the future loss, the 'dependency' used as the multiplicand should be the figure to which it is estimated the annual dependency would have amounted by the date of trial.

(4) No interest should be awarded on the future loss.

(5) No other allowance should be made for the prospective continuing inflation after the date of trial."

Computation of damages

In the Court of Appeal, the declared purpose of this change in practice was to afford the dependants some measure of protection against inflation by allowing calculation of the future loss to be made from the date of trial when salaries and wages are likely in times of inflation to be substantially above where they stood at the date of death. However, the House of Lords, in affirming this approach, rests its decision on the different ground that the new guidelines would lend greater reliability to the assessment of damages up to the date of trial. This was